That should work unless the playing software uses some sort of overlay thing to play the video - in that case you'll just get a solid block of whatever colour the player uses as the overlay colour.
And yes, definitely optimise the image, especially if you are going to send it via email!!! At work (My job involves maintenance of websites) we often get word, PPT etc documents that are massive because someone has pasted an uncompressed bitmap into the document and shrunk them to whatever size they wanted.
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Grrr... Argh....
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